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Morganton Company makes one product and it provided the following information to help prepare the master budget:
A) The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,400, 10,000, 12,000, and 13,000 units, respectively. All sales are on credit.
B) 40% of credit sales are collected in the month of the sale and 60% in the following month.
C) The ending finished goods inventory equals 20% of the following month’s unit sales.
D) The ending raw materials inventory equals 10% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound.
E) 30% of raw materials purchases are paid for in the month of purchase and 70% in the following month.
F) The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours.
G) The variable selling and administrative expense per unit sold is $1.80. The fixed selling and administrative expense per month is $60,000.
If the cost of raw materials purchases in June is $88,880, what are the estimated cash disbursements for raw materials purchases in July?

Respuesta :

jepessoa

Answer:

$93,956

Explanation:

Morganton pays 30% of its raw materials purchases during the current month and the rest (70%) is paid in teh following month.

Raw materials purchases for June = $88,880: $88,880 x 70% = $62,216 paid in July.

Raw materials purchases for July = $105,800: $105,800 x 30% = $31,740

total cash disbursements related to raw materials = $93,956

total cost of raw materials for July

budgeted unit sales 10,000          

- beginning inventory 2,000 units

+ desired inventory 2,400 units (20% of August's requirements)

units produced = 10,400

x 5 pounds of raw materials = 52,000 pounds

- beginning inventory of raw materials 5,200

+ ending inventory of raw materials 6,100 (10% of August's requirements)

total raw materials purchased 52,900 pounds

x $2 per pound                    

total raw materials cost for July $105,800

anthougo

The estimated cash disbursements for raw materials purchases in July are $93,956.

Data and Calculations:

Sales Budget

                                                    June         July       August   September

Sales units                                 8,400       10,000    12,000     13,000

Ending inventory                      2,000         2,400     2,600 (20% of 13,000)

Beginning inventory                (1,680)       (2,000)    (2,400)       2,600

Production units required     8,720       10,400     12,200

Raw Materials (pounds = units x 5):

Required for production       43,600       52,000      61,000

Ending inventory                    5,200           6,100 (10% of 61,000)      

Beginning inventory              (4,360)       (5,200)      (6,100)

Purchases of raw materials 44,440       52,900

Cost of purchases           $88,880   $105,800

Cash Payment for Purchases:

30% purchase month      $26,664       $31,740

70% following month                              62,216

Cash disbursement                            $93,956                      

Learn more: https://brainly.com/question/23384954

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